3.4.1 Follow-up to the Convention commitments on Technology Transfer

The first Conference of the Parties in Decision 13/CP.1 (UNFCCC, 1995) requested
the Convention secretariat to prepare an itemised progress report on concrete
measures taken by the Annex II Parties to fulfill their commitments related
to the transfer of environmentally sound technologies and of the know-how necessary
to mitigate and facilitate adequate adaptation to climate change. It also urged
Parties listed in Annex II to include this information in their national communications
in order to enable the Convention secretariat to compile, analyse, and submit
the documents to each session of the Conference of the Parties.

Box 3.4 outlines the subsequent development of these
issues in successive meetings of the SBSTA. It was evident from early discussions
in SBSTA and the Subsidiary Body for Implementation (SBI) that while information
from Annex II Parties is vital, the Parties recognised the complementarity of
the roles of public and private sectors with technology transfer. From here
on the emphasis was not just on Annex II Parties, but on urging all Parties
to improve the enabling environment for private sector participation, and to
support and promote the development of endogenous capacities and appropriate
technology relevant to the objectives of the Convention (UNFCCC, 1996d). The
work programme of the secretariat, in addition to its work on the technology
inventory database, included collecting information on: technology information
centres; technology information needs; adaptation technology; terms of transfer
of technology and know-how; and also private sector technology transfer. COP2
took note of the progress made in implementing Decision 13/CP.1 by reviewing
the Convention secretariat's documents on the subject, and expressed its concern
at the slow progress in obtaining relevant information on this matter (Decision
7/CP.1 (UNFCCC, 1996e). The Decision also requested Annex II Parties to submit
information so as to help Parties make informed decisions.

Box 3.4: Development of reporting and analysis
of technology transfer under the UNFCCC

The secretariat, after reviewing information from 21 Annex II Parties
in the aftermath of CoP1, organised information around multilateral, bilateral,
and private sector cooperation (UNFCCC, 1996c). It found that four parties
did not report on activities related to transfer of technology (most of
these communications were submitted prior to the CoP1 decision). The secretariat
found that the Annex II Parties submitted their communications as per the
guidelines, which did not require the kind of detail sought by Decision
13/CP.1. Additionally, the secretariat's document points out that the part
dealing with technology transfer could easily be subject to different interpretations
by the Parties. The in-depth review process revealed that much more information
is available than has been provided in the communications, leading the secretariat
to the conclusion that a comprehensive picture of technology transfer activities
was not available at that stage.

The secretariat prepared a report on the basis of 31 responses received
to its request for information and supplied the same to the Subsidiary
Body for Scientific and Technological Advice (SBSTA) (UNFCCC, 1996a).
It was difficult for the secretariat to draw specific conclusions based
on these responses. There was, however, a feeling that if more time were
to be available to the Parties and intergovernmental organisations, the
many other valuable reports and information sources could be reviewed
to help with the development of a long-term work programme. In response
to a decision by SBSTA at its second session, Annex II Parties submitted
information on technology inventory databases (UNFCCC, 1996 a and b)*.

The subsidiary bodies at their fourth and fifth sessions noted the progress
made by the secretariat, and requested it to intensify and accelerate
its efforts, and at the same time noted that the information provided
by Annex II Parties differed considerably in format, comprehensiveness
and level of detail. They urged the completion of an itemised progress
report by its seventh session on access to, and the transfer of, environmentally
sound technology, based on the national communications (UNFCCC, 1997a).
By the time they met for the sixth session, the scope of work by the secretariat
was enlarged to include specifically work with the World Bank, OECD, and
the possibility of establishing intergovernmental technical advisory panels
(ITAPs) at its seventh session. Moreover, there was support shown for
the secretariat's plans to prepare reports on the role of the private
sector, and on barriers and enabling activities of governments related
to the transfer of technology.

The secretariat in preparation for the seventh session of the subsidiary
bodies commissioned a number of papers and presented the key findings
in its progress report on the topic (UNFCCC, 1997c). While the summaries
are helpful in identifying the relative roles of different types of technologies
and centres and networks, one should look elsewhere to find the results
of the review of national communications of Annex II Parties (UNFCCC,
1997b). Reviewing these documents the SBSTA/SBI joint working group took
note of the need for better information with respect to finance and transfer
of technology, and agreed to consider at its ninth session what, if any,
additions and/or amendments to the revised guidelines for the preparation
of national communications by Annex II Parties would be required.

Decision 9/CP.3 (UNFCCC, 1998a) requested the secretariat to continue
its work, consult with the Global Environment Facility and other relevant
international organisations on international technology information centres
and exploring the possibilities of funding the same. It urges Parties
to create an enabling environment for the private sector to play its due
role, as well as improve the reporting by Annex II Parties in their national
communications.

In preparation for the eighth session of the subsidiary bodies, the secretariat
produced another progress report (UNFCCC, 1998b). While this report touched
on all of the various aspects of prior decisions, i.e. technology-information
needs survey, adaptation technology, centres and networks, it could not
say anything more on actions within Annex II, since any comment on this
issue will need to come from a review of national communications and a
review of available communications was already carried out earlier on.

*: Software packages include: IIASA's CO2Technology Data Bank, the World Bank's Greenhouse Gas Assessment
Methodology, Germany's Instruments for Reduction Strategies of
Greenhouse Gases, and the Netherland's Information System on Conservation
and Application of Resources Using a Sector Approach. Reports include:
IEA's Comparing Energy Technologies, the World Bank's The Case
for Solar Investments, and USEPA's A Guide for Methane Mitigation
Projects, Gas-to-Energy at Landfills and Open Dumps.

At Buenos Aires, Decision 4/CP.4 (UNFCCC, 1999a) recommended a series of practical
steps to promote, facilitate and finance the transfer of, and access to, environmentally
sound technologies and know-how. It outlined the importance of supporting the
development and enhancement of endogenous capacities and technologies of developing
country Parties, and identified areas where assistance in facilitating the transfer
of environmentally sound technologies and know-how is required. It is addressed
to all of the Parties in light of various provisions of the Convention (Articles
4.1, 4.3, 4.5, 4.7, 4.8, 4.9 and Articles 9.2, 11.1, 11.5). It asked Annex II
Parties to provide a list of environmentally sound technologies and know-how
related to adaptation to and mitigation of climate change that are publicly
owned, and to report in their national communications steps taken to implement
Article 4.5 of the Convention. It asked non-Annex I Parties to submit their
prioritised technology needs. It invites all Parties and interested actors to
identify projects and programmes that can serve as models for improving the
diffusion and implementation of clean technologies under the Convention.

This survey illustrates the fact that technology transfer has been on the agenda
of every session of SBSTA. Despite all of the discussions within and various
papers produced by the secretariat, there has been limited progress on determining
what constitutes technology transfer, the roles of the governments and private
sector, and how compliance with Article 4.5 should be measured. As a note by
the secretariat (UNFCCC, 1998c) pointed out, reaching agreement on these issues
is of fundamental importance. It is vital that there be simple and agreed upon
criteria for measuring whether Annex II Parties have met their commitments;
the guidelines for national communications should clearly identify formats for
reporting financial information (as an indication of the amount of technology
transferred). In other words, as the secretariat pointed out, developing and
reaching an agreement on what constitutes "success" might be an important
issue for the Parties to consider.

Outside of formal discussions within UNFCCC, other initiatives on technology
transfer are notable. Stemming from initiatives by Japan and Germany, the Climate
Technology Initiative (CTI) was developed through the International Energy Agency
(IEA). The CTI is still in evolution, but its activities include a variety of
voluntary actions by IEA member states: setting up national advice and technological
development plans; offering prizes for technological development; enhancing
markets for emerging technologies; and promoting collaboration between states
on technology research and development. In addition, the CTI has also established
regional seminars on climate change related technology, and has worked in collaboration
with the SBSTA.

In 1997, the IEA announced that it would increase its work with the CTI and
seek new collaboration with existing bodies like the ISO. A new Global Remedy
for the Environment and Energy Use (GREEN) initiative was also established,
aiming to enhance the use of climate change mitigating technology in ODA and
private investment.

However, the impacts of these official attempts to generate technology transfer
are as yet unclear, and in terms of total investment are relatively limited
compared with mainstream investment flows. Other complementary approaches have
thus also been proposed. P. du Pont et al. (1997) highlight that industrialised
countries, at the same time as calling for stronger action in developing countries,
frequently export to them second-hand equipment that is old, inefficient and
polluting. Citing examples from vehicles, and from the pulp and paper industry,
they note that facilities (cars or industrial plants) are exported that are
essentially obsolete and no longer meet standards in industrialised countries.
They suggest that such exports should be discouraged, for example, by using
a tax credit in developed countries to accelerate equipment renewal (perhaps
granted only if the obsolete technology is not exported) or by "negative
emission credits" for export of second-hand technologies that increase
greenhouse gas emissions compared with state-of-the-art technology (du Pont.
et. al., 1997). Procedures requiring "prior informed consent" from
recipient countries, analogous to those in the international agreements on hazardous
wastes and chemicals, might offer a "softer" alternative.

Overall, the need to better engage the private sector and to harness private
investment, and much learning since the UNFCCC (including experience with AIJ
projects summarised elsewhere in this Report), has implied rethinking the ways
in which the UNFCCC has approached technology transfer. This has become clearer
in the Kyoto Protocol and subsequent decisions.